Source:Forbes Forbes Investing
Published Wednesday, Aug. 19, 2011 09:5 PM
They are. Billions, in fact. Only, they are just not investing here in the U.S.
Atlanta based Coca-Cola (KO) plans to invest $4 billion in China, the company’s CEO Muhtar Kent told reporters in Shanghai this week. It’s the company’s biggest planned investment in China since the 2009 investment of $2 billion. The investments will start next year and is part of the company’s China capex until 2014.
Massachusetts luggage maker Samsonite opted to list in Hong Kong in the second quarter rather than do its initial public offering on the NYSE. The new China investments will focus on innovation, infrastructure and expansion of its production capacity. The company now has six manufacturing centers in the country.
“U.S. corporations are actually in good shape and a lot of that is due to emerging markets, particularly the BRIC countries,” fund manager Paul Dietrich of Foxhall Capital Management in Orange, Conn told Forbes on Friday. The BRIC countries are Brazil, Russia, India and China.
In 2010 Coca-Cola invested US$250 million in India because it has shown the highest volume growth in its international markets. The funding will increase Coca-Cola investment in the country by 20 percent and will be used to expand operations from bottling to buying delivery trucks and refrigerators for small retailers.
“We have had 11 consecutive quarters of growth in India,” Atul Singh, president and chief executive of Coca-Cola India Inc. told the Wall Street Journal. “What we are seeing is that there is still demand not only in the urban centers and big metros but across the different segments of India.”
The prospect of robust demand in India as an emerging market serves as counterpoint for multinational companies that are facing declining deman in their developed markets
Low growth in the U.S. and Europe have essentially forced the hands of the big multinationals to look for growth elsewhere. “In this low growth environment, we will continue to see European and American multinational companies spending in countries far from home,” says Martin Schulz, managing director of international equities at PNC Capital Advisors in Columbus, Ohio.
Condensed Revised Verson
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